Taiwan share prices are likely to run into strong resistance at around 8,100 points next week with many investors sidelined due to a lack of fresh leads, dealers said Friday.
Recent reductions in daily turnover point to range-bound trade, with investors moving funds out of the Taiwan into other markets in the region, in particular China in an effort to get a better return, they said.
Against this background, small- and mid-cap stocks may do better than their larger peers but that will not be enough to drive the market ahead strongly, leaving a trading range of between 7,900 and 8,100 points next week.
For the week to May 11, the weighted index closed down 34.52 points or 0.43 percent at 8,031.54 after a 1.47 percent increase a week earlier. Average daily turnover stood at 92.06 billion dollars (2.76 billion US), compared with 101.24 billion dollars.
"The market is expected to remain quiet on falling liquidity next week," Yuanta Core Pacific Capital Management analyst Jacky Tam said. Daily turnover fell to 82.35 billion dollars Friday, the lowest level in almost one month.
"During the consolidation, the best policy for now is watch instead of cutting holdings as the market is expected to revive later this year on improving corporate fundamentals," Tam said.
President Securities analyst Johnny Lee said rotational interest is expected to be the main theme. "I expect only small- and mid-cap stocks, such as inter-net networking service providers and integrated circuit designers, will benefit from such quick rotational interest given the on-going fund exodus," Lee said.
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